General Electric (NYSE: GE) closed at $20.35 Tuesday. GE November option implied volatility of 52 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.
Siemens (NYSE: SI) closed at $63.97 Tuesday. SI November option implied volatility of 86 is above its 26-week average of 37 according to Track Data, suggesting larger price movement.
Philips Electronics (NYSE: PHG) closed at $18.71 Tuesday. PHG November option implied volatility of 68 is above its 26-week average of 43.
United Technologies (NYSE: UTX) closed at $50.95 Tuesday. UTX November option implied volatility of 53 is above its 26-week average of 33.
Hitachi Ltd (NYSE: HIT) closed at $51.63 Tuesday. HIT November option implied volatility of 71 is above its 26-week average of 36 according to Track Data.
Honeywell (NYSE: HON) closed at $28.85 Tuesday. HON November option implied volatility of 66 is above its 26-week average of 37.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Baird upgraded Bank of America (NYSE: BAC) to Outperform from Neutral citing valuation and long-term earnings power.
Keefe Bruyette upgraded shares of Nationwide Financial (NYSE: NFS) to Outperform from Market Perform as it believes the deal is not at risk and will close at the agreed upon $52.25 price.
Friedman Billings upgraded American Eagle (NYSE: AEO) to Outperform from Market Perform citing valuation.
Eli Lilly (NYSE: LLY) was upgraded to Hold from Sell at Natixis.
W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Neutral at RW Baird.
Fidelity National (NYSE: FIS) was upgraded to Buy from Neutral at SunTrust.
Analyst downgrades:
Credit Suisse downgraded Eli Lilly NYSE:(LLY) to Neutral from Outperform citing the increased risk profile from the ImClone (IMCL) deal.
Soleil downgraded Google (NASDAQ:GOOG) to Hold from Buy as it believes Google's cost management may lag revenue weakness and that the falling stock price implies employee defections. The firm lowered its target to $350 from $580.
Piper downgraded shares of Orbitz (NYSE:OWW) to Sell from Neutral to reflect deteriorating travel industry fundamentals and the company's levered balance sheet.
US Steel (NYSE:X) was downgraded to Neutral from Buy at Goldman.
Bidz.com (NASDAQ:BIDZ) was initiated with a Hold at Stamford, as the firm does not want to recommend a company that has never been tested during difficult economic times, but is positive on BIDZ's growth potential.
American Superconductor (NASDAQ:AMSC) was initiated with a Hold at Stanford, as the firm believes the Euro decline and global market turmoil are near-term risks.
Union Bankshares (NASDAQ:UBSH) was initiated with an Underperform at RBC Capital, as the firm views shares as overvalued.
Regis Corp (NYSE:RGS) was initiated with a Neutral at RW Baird.
CommVault's (NASDAQ:CVLT) coverage was resumed with a Neutral at Merrill Lynch.
Barclays upgraded the Integrated Oil sector to Positive from Neutral citing valuations. Note that Exxon Mobil (NYSE: XOM) was upgraded to Overweight from Equal Weight based on valuation.
After Force Protection (NASDAQ: FRPT) reported that its 1H08 sales increased more than 200%, Stanford thinks that Force Protection could be poised for several new opportunities in 2009 and they believe the company's risk is already priced into the stock; the firm raised Force Protection to Hold from Sell.
Cowen expects eHealth (NASDAQ: EHTH) to benefit from the steady decline in employer-sponsored health insurance offered by small businesses and reduced regulatory risk, among other reasons. The firm upgraded shares to Outperform from Neutral.
Allied Capital (NYSE: ALD) was upgraded to Market Perform from Underperform at BMO Capital.
Caris upgraded Carmike Cinemas (NASDAQ: CKEC) to Above Average from Average.
JP Morgan cut Philips (NYSE:PHG) from "overweight" to "neutral" according toMarketWatch.
Merrill Lynch downgraded Bank of America (NYSE:BAC) from "neutral" to "sell" according toBriefing.com. The news service also writes that Citigroup upgraded Yahoo! (NASDAQ:YHOO) from "hold" to "buy".
CIGNA (NYSE:CI) was raised to "outperform" at Credit Suisse according to247wallst.com.
MOST NOTEWORTHY: DuPont, eBay, Google and Philips Electronics were today's noteworthy downgrades:
Oppenheimer believes DuPont's (NYSE: DD) guidance will be difficult to achieve given the potential recession and notes recent share strength. The firm lowered its rating to Underperform from Perform.
Citigroup downgraded shares of eBay (NASDAQ: EBAY) to Hold from Buy and lowered their target to $31 from $49 following the EBAY's Q4 results, as they believe its outlook is more uncertain following the company's cautious macro comments.
Stanford downgraded Google (NASDAQ: GOOG) to Hold from Buy citing slowing e-commerce and search volume growth, along with the global slowdown.
Credit Suisse downgraded shares of Philips Electronics (NYSE: PHG) to Underperform from Neutral, as they see no near-term catalysts and believe the company's sales growth is vulnerable to any economic slowdown.
OTHER DOWNGRADES:
Broadpoint lowered its rating on THQ (NASDAQ: THQI) to Sell from Neutral.
Goldman downgraded Sepracor (NASDAQ: SEPR) to Sell from Neutral.
Morgan Stanley lowered Trane (NYSE: TT) to Underweight from Equal Weight.
Washington Mutual Inc. (NYSE: WM) reported a fourth quarter $1.87 billion loss, hurt badly by the sinking value of its mortgage portfolio. The quarterly loss was $2.19 per share, compared with a profit of $1.06 billion, or $1.10 per share in the same period last year. WaMu shares are up 2.3% in premarket trading.
Schlumberger (NYSE: SLB) said Friday profit rose 22% in the fourth quarter due to strong demand for oilfield services. The results were below Wall Street estimates and the shares are down over 3% in premarket trading. Earnings rose to $1.38 billion in the fourth quarter, or $1.12 per share, on revenue of $6.25 billion. Excluding a gain, the company's earnings rose to $1.37 billion, or $1.11 a share. Analysts polled by Thomson Financial had expected fourth-quarter earnings of $1.13 per share on revenue of $6.14 billion.
MOST NOTEWORTHY: Intel, Respironics and First Horizon were today's noteworthy downgrades:
JP Morgan lowered its rating on Intel (NASDAQ:INTC) to Neutral from Overweight, as their checks indicate a late-quarter slowdown for Intel in order rates from the PC end market, which offset the upside the company experienced in earlier in Q4.
Banc of America downgraded shares of Respironics (NASDAQ:RESP) to Neutral from Buy to reflect the acquisition by Philips (NYSE:PHG).
Friedman Billings downgraded First Horizon (NYSE:FHN) to Underperform from Market Perform, citing its exposure to home equity and construction loans and mortgage banking operations. The firm adds that it expects the company to cut its quarterly dividend.
Philips said the acquisition significantly strengthens Philips Healthcare, will provide a strategic platform for further growth, and also leverages the acquisitions of Lifeline and Raytel.
Pennsylvania-based Respironics manufactures masks and ventilators for use in patients homes for the treatment of breathing disorders.
Respironics (NASDAQ: RESP) will be acquired by Philips (NYSE: PHG) for $66 in cash per cash. RESP, a provider of treatments for Obstructive Sleep Apnea, closed at $53.61. RESP over all option implied volatility of 28 is near its 26-week average according to Track Data, suggesting non-directional risk.
Genentech (NYSE: DNA) closed at $67.96. DNA will report EPS on January 14th. DNA January option implied volatility of 30 is above its 26-week average of 26 according to Track Data, suggesting larger price risk.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Stock futures were higher this morning after Research in Motion reported strong earnings after the bell Thursday and reports Merrill Lynch could be in talks to get a $5 billion capital infusion.
Thursday, U.S. stocks finished another volatile session higher after Oracle reported blow-out profits and a good outlook. The Dow industrials rose 38 points, or 0.29%, the S&P 500 gained 7 points, or 0.49%, and the Nasdaq Composite outdid them, climbing 39 points, or 1.53%.
Several economic readings are due today:
At 8:30 a.m., November personal income and spending is due, with a rise of 0.5% and 0.7% expected respectively, following a 0.2% gain the month before for both.
At the same time, a favored inflation measure at the Federal Reserve will be released, core PCE price index, which is expected to remain unchanged from last month at 0.2%.
Finally, at 10:00 a.m., the University of Michigan's consumer confidence poll for December will be reported.
General Electric (NYSE: GE) and Philips Electronics (NYSE: PHG) could be two big winners if the revised Energy Bill passes the U.S. House and is signed, as expected, by President Bush.
The bill, which moved to the House Tuesday after passage by the U.S. Senate, phases-out the use of incandescent light bulbs in the U.S., Bloomberg News reported Tuesday.
The primary replacement bulb technology, at least for next half-decade, would be fluorescent light bulbs, which typically use only 25-30% of the energy of comparable incandescent bulbs. Philips, the largest light bulb maker in the world with sector leadership in Europe, is expected to be a major beneficiary of the law change, along with No. 2 bulb maker General Electric, the leader in U.S. light bulb sales.
A spokesman for President Bush said the president will sign the legislation. Opposed to the original bill, President Bush reversed his stance after lawmakers revised the bill and dropped both a tax increase for oil and gas companies and a requirement that some utilities get 15% of their power from renewable sources.
MOST NOTEWORTHY: Global biotech stocks and Genlyte were today's noteworthy downgrades:
Bernstein said biotech stocks are still not cheap compared to traditional pharma and that catalysts are limited near-term. The firm downgraded stocks including Amgen (NASDAQ:AMGN) and Celgene (NASDAQ:CELG) to Neutral.
Genlyte (NYSE:GYLT) was downgraded to Neutral from Outperform at Baird following its acquisition by Philips (NYSE:PHG).
OTHER DOWNGRADES:
Keefe Bruyette downgraded First American (NYSE:FAF) to Market Perform from Outperform.
Portugal Telecom (NYSE:PT) was downgraded to Neutral from Buy at Merrill Lynch.
Goldman downgraded the automobiles sector to Cautious from Neutral.
MOST NOTEWORTHY: Deere, Boeing and Air France were today's noteworthy upgrades:
Banc of America upgraded shares of Deere (NYSE: DE) to Buy from Neutral and raised their target to $186 from $130 as they expect upside in 2008 from favorable global agriculture fundamentals.
Wachovia raised its rating on Boeing (NYSE: BA) to Outperform from Market Perform citing favorable risk/reward as domestic economic concerns and 787 development risks are discounted in valuation.
Air France (NYSE: AKH) was upgraded to Buy from Hold at Citigroup, as they believe the company's joint venture with Delta Air Lines (NYSE: DAL) will boost margins.
OTHER UPGRADES:
Baird upgraded OmniVision (NASDAQ: OVTI) to Neutral from Underperform.
Deutsche Bank upgraded Philips Electronics (NYSE: PHG) to Buy from Hold.
Tidewater (NYSE: TDW) was upgraded to Buy from Hold at Jefferies.
Lehman raised Kimberly Clark (NYSE: KMB) to Equal Weight from Underweight.
The deal values Genlyte at about $95.70 per share, or about a 50% premium over Genlyte's Friday closing price. Genlyte's shares surged $31.50 (just over 50%) to $94.17 in Monday morning trading. Philips gained 24 cents to $42.46.
Philips said the deal will strengthen its position in energy-efficient lighting, adding that with Genlyte it will surpass rival General Electric (NYSE: GE) as the largest lighting company in North America. GE's shares fell 14 cents to $37.53.
Stock Analysis: It looks like Philips has executed a smart purchase at a fair price. In Genlyte, Philips will gain greater access to U.S. distributors, which will increase sales of its fluorescent and next-generation light-emitting diode (LED), energy-saving light bulbs. The deal will also add to Philips's manufacturing capacity. Philips has the light bulb / lighting lead in Europe, but (understandably) it trails GE in North America. Hence the Genlyte deal underscores its commitment to compete on both continents with GE, as the market for energy-efficient lighting expands at a healthy rate in the years ahead.
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